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Shell moves to keep open 2014 Alaska drilling option

Thu, 07th Nov 2013 08:10

LONDON, Nov 7 (Reuters) - Royal Dutch Shell, whichabandoned this year's offshore Alaska drilling programme after aseries of setbacks in 2012, has submitted a stripped-downexploration plan to U.S. authorities in a move that aims to keepits options open to drill in summer 2014.

"Shell submitted revisions to its previously approved Planof Exploration Wednesday, Nov. 6 to the Department of Interior;this process is required to keep the company's 2014 explorationoptions viable," the company said in a statement.

"The plan details Shell's exploration program for multiplewells in the Chukchi Sea."

Shell's 2012 plan included drilling in the Beauforts Sea aswell. Both seas are off Alaska's remote northern coast and areinaccessible for drilling in the winter.

The Chukchi is the more westerly of the two. Financedirector Simon Henry said last week any new drilling programmewould be focused on the Chukchi only.

Shell's Arctic campaign was beset by accidents and a risingtide of environmental protests and regulatory scrutiny in 2012.

Problems came to a head at the end of that year when theKulluk, a rig that had been drilling in the Beaufort Sea, cameloose from a vessel towing it south for the winter and ranaground near Kodiak Island.

Henry said last week that the Kulluk, one of a handful ofspecialised Arctic drilling rigs worldwide, would not bereturning to the Beaufort Sea and Shell had commissioned areplacement.

Shell has spent about $5 billion on the search for oil inAlaska's Arctic seas since it won licences to drill there in2005.

Analysts say the allure of Alaska's offshore and otherArctic seas for oil drillers remains strong given thecomplications of politics and violence they face in other partsof the world.

Drilling in the cold, remote waters is technologicallydifficult and expensive, but dwindling reserves elsewhere haveforced oil firms to look deeper offshore.

The seas are shallow and are estimated to contain 13 percentof the world's undiscovered oil and 30 percent of its gas.

"We will continue to take a methodical approach to thisexploration phase and will only proceed if the program meets theconditions necessary to proceed safely and responsibly," thecompany said.

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